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The realities -- and pitfalls -- of giving away money

A Salvation Army donation.

Diana Barrett is the only person I’ve ever heard compare philanthropy to bowling.

“You’re picking up that ball,” said Barrett, “and you can’t see what you’re hitting because you’re wearing a blindfold. So you kind of go voooomp! Did I hit anything?! You can’t improve it because there’s no learning curve. That’s what philanthropy is like.”

Having talked with Hal Ornstein who only just founded his own family foundation this past summer, I wanted hear from an experienced grant-maker: someone who could talk with me about the realities, and perhaps the pitfalls, of giving away lots of money.

“It really is difficult,” she said, “People laugh about that and say, ‘I’d like to have that problem.’”

These days Barrett runs a very successful foundation called The Fledgling Fund. It gives money to filmmakers who are making socially impactful documentaries, and then helps builds outreach campaigns around those films. She founded the fund in 2005. Four of her grantees have won Emmy awards and four others have won Oscars, including the makers of “Born Into Brothels,” a film about the children of Calcutta prostitutes.

The wealth that capitalized Fledgling was originally created by Barrett’s father, Joseph King, who has been called a pioneer in investment banking. Upon King’s death, his widow Gioconda King was advised to set up a foundation for tax reasons. The Gioconda and Joseph H. King Foundation was to aid immigrant populations in New York, and Barrett ran it -- or rather, she tried to.

“I thought it would be a way of bringing us together,” said Barrett, “Didn’t work. Every time I brought something up she had no interest whatsoever. To a certain extent, it exacerbated problems that we already had.”

This was the first of many lessons Barrett learned about philanthropy: family foundations are only as healthy as the family is.

“A lot of people have found that their family foundations are just being split into pieces because they can’t get along with their siblings,” she said, “I mean one sibling is really interested in saving wolves and the next one doesn’t care about wolves but he cares about whales. That’s a whole other market. Wolves and whales don’t run in the same market.”

Be it wolves or whales, Barrett says many of her philanthropic peers neglect to do their due diligence before they begin throwing money at their cause of choice.

“The big thing in philanthropy is that people say ‘find your passion,’ when you start a foundation,” said Barrett rolling her eyes. “Passions need to be educated. You’ve got to figure out what this passion is all about. Who’s in the field? You have to bury your ego. Very often I see people starting foundations thinking that the sun kind of sets on their head.”

Perhaps the most surprising reality: according to Barrett, grantees might seek to impress their benefactors by saying a program is going great when it isn’t.

“There are all sorts of issues that come into play that nobody tells you about,” she said, “Firstly there’s the power relationship. You have money. They don’t. There is no incentive for people to tell you the truth about what’s happening in an organization. No incentive to tell you that they used the money wisely. No incentive to tell you that they tried something and it failed.”

That’s the sort of information you need if you really want to make a difference, she said. To return to her bowling analogy, if you’re not getting the right feedback, or any feedback, about your philanthropic efforts, you might end up with nothing but gutter-balls.

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Charitable giving is a worthy subject, so all the more shameful that you guys missed the boat. Apparently you need my help so here are 2 critical issues that should have been addressed:
1) Most Americans believe that deductions are credits, i.e., donors receive tax reduction equal to the amount given, whereas instead the benefit is only equal to the tax bracket (times the donation). So a donor who is at least $1k into the 30% tax bracket (fed and state) who gives $1k will reduce their taxes by $300 so net $700 less in pocket. A significant misunderstanding worth correcting by a news program.
2) Rather than juxtapose the Met with flood victims, why didn't you tackle religious organizations? Why should taxpayers subsidize Christians, Jews, Muslims, etc., who want to proselytize, build a new bldg., etc.? That is a worthier issue than wealthy people donating to museums open to the public instead of soup kitchens.

So now that you have this free help, pls address these oversights before you are taken off the air.

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